McCarty: Florida at 'Critical Crossroads' on Road to PIP Reform

NU Online News Service, Feb. 7, 1:51 p.m. EDT

Florida Insurance Commissioner Kevin McCarty says that if the Florida legislature does nothing to reform the state’s no-fault, personal injury protection auto insurance system, rates will simply continue to increase and lawmakers could be forced to repeal the law.

The commissioner, speaking during a media conference call organized by a group called Put the Brakes on Accident Fraud, says the state is at a “critical crossroads,” and must work to reform the PIP system.

And if nothing gets done this year, McCarty says insures will “continue to be aggressive” with rate increases in order to capture enough premium to pay for a system the insurance industry says is plagued by fraud.

He says it will be up to legislators to decide at which point they will allow rates to rise in a state already engaged in a constant affordability/availability fight in its homeowners’ insurance market.

Eventually, the PIP system will be repealed due to rate increases if nothing is done, he says.

Currently—though the number of drivers has stayed constant and accidents are down—PIP rates are up as costs have skyrocketed.

Though some have called for a repeal of PIP now, McCarty says the state needs to focus on returning PIP to its original purpose by doing things like establishing a reasonable fee schedule, improve an insurer’s ability to investigate claims and limit attorneys’ compensation.

The state’s auto insurance laws need to stop being a “pot of gold for unscrupulous providers and fly-by-night clinics,” McCarty says.

McCarty has joined Gov. Rick Scott and Chief Financial Officer Jeff Atwater on the steps of the Capitol Building to raise the level of awareness of PIP fraud and encourage reform. The message, McCarty says, is getting across. There is a “bold coalition” focused on fixing the problems this year, he says.

For years the industry has alleged fraud by the state’s healthcare clinics, along with outrageous attorneys’ fees and organized staged-accident rings to take advantage of holes in the system. The Property Casualty Insurers Association of America (PCI) asserted in an October 2011 special report on Florida’s no-fault system that false claims have cost the state’s drivers more than $800 million.

The Florida House Civil Justice Subcommittee passed HB 119 late in January. The bill replaces the mandatory PIP, no-fault insurance coverage with “emergency care coverage.”

Comments

Resource Center

View All »

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Guide: Top 15 E&O Risks-And How To Avoid Them

Accidents happen. But when it's an errors and omissions oversight, that accident can open your...

We'll Show You How to Reach Your Sales Goals

Whether you work alone or have a team of agents working for you, we can...

Claims Connection eNewsletter

Breaking news on disasters, fraud, legal trends, technology, and CE initiatives for the P&C claim professional – FREE. Sign Up Now!

Claims-Handling Guidelines

Claims Magazine is providing the following free guidelines and regulations in order to help adjusting professionals stay abreast of each state’s unique property and casualty claim-handling requirements.

View our State Guidelines »

Advertisement. Closing in 15 seconds.